Gold price crashes again as dollar value rises | Mining

ADELLA HARDING Elko Daily Correspondent

Gold prices slid to fresh 2022 lows on Thursday as the U.S. dollar strengthened and amid fears the Federal Reserve could raise interest rates higher than initially expected.

The spot price of gold in New York was $1,710.40 an ounce at market close on Thursday, down from $1,735.62 an ounce at the July 13 close. The COMEX futures price for August gold fell to $1,695 an ounce on Thursday.

London PM’s low fixed price so far in 2022 was $1,700.70 per ounce on Thursday, and $2,039.05 per ounce on March 8, according to Kitco charts. The 2021 low was $1,683.95 per ounce on March 30 and last year’s high was $1,943.20 on January 4.

Shares of gold mining companies operating in Nevada also fell, including the five largest.

Shares of Barrick Gold Corp. were at $15.88, down 69 cents, and shares of Newmont Corp. were at $55.19, down $3. Shares of Kinross Gold Corp. were at $3.12, down 23 cents, and shares of SSR Mining Inc. were at $16.30, down 27 cents. Shares of gold and silver producer Coeur Mining Inc. were at $2.75, down 20 cents.

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New York spot silver prices also fell, to $18.45 an ounce from $19.20 on July 13.

The fall in gold prices comes as inflation hit 9.1%, according to figures released earlier this week, and concerns grew that the Fed would raise the interest rate higher than expected, the oil prices have fallen and the war in Ukraine continues.

Analysts now expect the Fed to raise interest rates by 100 basis points instead of 75 basis points, and MarketWatch reported that on Thursday the US dollar hit its highest level against the Japanese yen. since 1998.

Daniel Ghali, senior commodity strategist at TD Securities, told Kitco that “a major sellout event could play out in gold. Golden insects fall like dominoes. With prices defying pre-pandemic levels, the risks of a major capitulation event in precious metals are increasing.

James Grant, founder and editor-in-chief of Grant’s Interest Rate Observer and author, said in a July 13 webinar sponsored by the World Gold Council that the Fed is “forced to attack inflation that it didn’t have.” not planned”. He said central bankers had not expected inflation to continue to rise and now had to deal with it.

He said he thinks the Fed is “probably going to overdo it. I think he was hampered by a lack of foresight.

Juan Carlos Artigas, global head of research at the World Gold Council, told the webinar that while gold is down despite traditionally being an inflation hedge, gold has an edge with its side. consumer, such as jewelry. And he said central banks had invested in gold for 13 straight years.

In the recent World Gold Council Mid-Year Outlook, the WGC states that gold has historically performed well in an environment of high inflation. In years when inflation was above 3%, the price of gold increased by 14% on average.

Artigas and Grant agreed that gold isn’t doing as well as investors had hoped, but Grant said he thinks “gold will do well as people start to lose faith in the central bank.” . Artigas said it was “a very volatile market for investors”.

Peter Spina, president and CEO of GoldSeek.com, told MarketWatch that the July 14 gold price losses could provide “a great opportunity to hoard” gold, but “don’t expect not a race to record highs for gold just now.”

In the World Gold Council webinar, Artigas cited expectation of the outlook for two key headwinds in the second half of 2022 – higher nominal interest rates and a potentially stronger dollar – and statement of the outlook according to which the negative effect of these two factors could be offset by rising, persistent inflation with gold catching up with other commodities, market volatility linked to changes in monetary and geopolitical policy and the need for effective hedges that overcome the potentially higher correlations between stocks and bonds.

Grant cited the “collision between rising rates and the expectation of higher rates” and the “structure of finance that has been the co-product of a dozen years of radical monetary policy” as factors prompting concerns. business credit concerns.

“Credit is a risk, and gold is the answer,” he said.

Grant said investors should also pay attention to what is happening in China.

“I think the drama is unfolding in China. Credit rivets are bursting daily in China,” Grant said, commenting that “seemingly impossible prosperity” there meant massive injections of credit for continued construction and growth.

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